Geojit has given Buy recommendation for HDFC Bank with a target price of Rs. 1653 in its research report issued on Apr 22, 2021
Geojit’s research report on HDFC Bank
HDFC Bank was incorporated in August 1994. It provides corporate banking and custodial services and is also involved in treasury and capital markets. In addition, it offers project advisory services and capital market products, including GDR and currency bonds. In Q4FY21, the bank saw a net interest income (NII) of Rs. 18,524cr (+13.9% YoY) as the core Net interest margin (NIM) stood at 4.2%. GNPA ratio improved 6bps QoQ to 1.32% and NNPA remained flat as compared to the previous quarter(pro-forma) at 0.40% in Q4FY21. The bank’s proposal to raise capital (~Rs. 50,000cr) will provide the necessary cushion to protect the balance sheet in the coming quarters.
Outlook
With healthy revenue growth and stable asset quality, we upgrade rating to BUY and value the stock at 3.4x FY23E BVPS with a revised target price of Rs. 1,653.